Miller v. Zoby

• Decision Date: 28 August 1991
• Docket Number: No. A-3867-89T1,A-3867-89T1
• Citation: 595 A.2d 1104,250 N.J.Super. 568
• Parties: Gordon E. MILLER, Kenneth O. Miller and Charles N. Cooper, as Co-Executors of the Estate of Albert Miller, Plaintiffs-Appellants, v. Roland A. ZOBY and Greate Bay Hotel and Casino, Inc., t/a The Sands Hotel and Casino of Atlantic City, j/s/a, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 568

250 N.J.Super. 568

595 A.2d 1104

Gordon E. MILLER, Kenneth O. Miller and Charles N. Cooper, as Co-Executors of the Estate of Albert Miller, Plaintiffs-Appellants, v. Roland A. ZOBY and Greate Bay Hotel and Casino, Inc., t/a

The Sands Hotel and Casino of Atlantic City,

j/s/a, Defendants-Respondents.

No. A-3867-89T1

Superior Court of New Jersey,

Appellate Division.

Argued April 10, 1991.

Decided Aug. 28, 1991.

Stacy L. Moore, Jr., for plaintiffs-appellants (Parker, McCay & Criscuolo, attorneys; Stacy L. Moore, Jr., Marlton, on the brief, and supplemental letter brief).

Peter M. Sarkos, for defendant-respondent Ronald A. Zoby (Horn, Kaplan, Goldberg, Gorny & Daniels, attorneys; David S. Lieberman on the brief; Peter M. Sarkos, Atlantic City, on the letter brief).

Frederick H. Kraus, for defendant-respondent The Sands Hotel and Casino of Atlantic City; Frederick H. Kraus, Atlantic City, on the brief, and letter brief).

Before Judges KING, LONG and STERN.

The opinion of the court was delivered by

KING, P.J.A.D.

The issue presented is whether a violation of the Casino Control Act, N.J.S.A. 5:12-1 to -190, (Act); L. 1977, c. 110, by a casino licensee should create an implied private cause of action for money damages in favor of a player. In this case plaintiffs co-executors claim that "The Sands Hotel and Casino" (Sands) violated certain statutes and regulations concerning the extension of credit to their decedent, Albert Miller, resulting in his gambling losses of $267,000. We find no legislative intent in the Act to confer a private cause of action in favor of losing players in instances of violations of the Act's regulatory framework relating to credit concerns. Absent such a manifestation of legislative purpose, we will not by implication judicially create a cause of action in the circumstances. We affirm the dismissal of plaintiffs' complaint.

Defendant Roland A. Zoby was a "junket operator," licensed by the Casino Control Commission. He had worked for defendant Sands since 1981. The Act defines a "junket" as:

[a]n arrangement the purpose of which is to induce any person, selected or approved for participation therein on the basis of his ability to satisfy a financial qualification obligation related to his ability or willingness to gamble or on any other basis related to his propensity to gamble, to come to a licensed casino hotel for the purpose of gambling and pursuant to which, and as consideration for which, any and all of the cost of transportation, food, lodging, and entertainment for said person is directly or indirectly paid by a casino licensee or employee or agent thereof. [ N.J.S.A. 5:12-29].

Zoby and Sands had executed formal "Junket Representative Agreements." Zoby's earnings as a "junketeer" were based in part on a percentage of a "theoretical win" statistic based on the amount of casino play by the junket clients he brought to the Sands. According to Zoby's brief the agreement required him, as a junket representative, to "provide patrons to the Sands who generate gambling play yielding $1.5 million in gross statistical wins" per year. Zoby described gross statistical wins as the "number of times an individual plays multiplied by the amount of the bet multiplied by the number of opportunities to play."

Albert Miller, plaintiff's decedent, was a widower, age 79, who lived in Norfolk, Virginia. Between 1983 and 1986 Miller joined Zoby and other gamblers on junkets to the Sands. Plaintiffs contend that Zoby knew that Miller was a compulsive gambler. Miller apparently wrote personal and business checks to Zoby who had advanced or loaned him cash. Plaintiffs assert that the advances were for gambling; Zoby claims that he advanced money only to repay loans which other players had made to Miller. Plaintiffs allege that Miller depleted his "liquid assets," borrowed from his family and spent over $150,000 in funds belonging to "Delmar, a company in which he had only a 23% interest" to repay Zoby. Miller's last junket to the Sands was on August 22 and 23, 1986. He died on September 14, 1986. Plaintiffs' complaint alleges that Miller wrote 16 personal checks to Zoby, totalling $116,260. Miller also wrote 15 business checks to Zoby totalling $151,000. Plaintiffs allege that Zoby endorsed the checks and deposited each in his account. Plaintiffs allege that Miller died still owing Delmar $76,000. Plaintiffs generally contend that if Zoby had not advanced Miller these funds, in violation of New Jersey statutes and regulations, he would not have depleted his estate. For purposes of this appeal, we accept plaintiffs' allegations as true.

As a result of these transactions, the Division of Gaming Enforcement of the Attorney General's Office proceeded before the Casino Control Commission against Zoby and Sands for regulatory sanctions. After a hearing, the administrative law judge found that Zoby had violated certain sections of the Act and regulations by "use of his casino credit account to draw against for the purpose of transferring gaming chips to junket participants" in violation of " N.J.S.A. 5:12-101 and N.J.A.C. 19:45-1.27." The ALJ found Sands "strictly liable for Zoby's violations" because of its lack of oversight. See also N.J.A.C. 19:45-1.25 (controls over credit to gamblers). The ALJ found a violation of N.J.S.A. 5:12-102(l )(2) prohibiting junket representatives from "exercis[ing] approval authority with regard to the authorization or issuance of credit pursuant to [ N.J.S.A. 5:12-101]." Sands also was held responsible for this violation. In addition, the respondents were also found guilty of violations relating to lack of documentation and accounting in respect to these transactions.

On March 12, 1990 the Commission adopted the ALJ's findings and conclusions, but only in part. Specifically the Commission entered an order which in pertinent part stated:

IT IS on this 12th day of March, 1990, ORDERED that, for the reasons stated in the record of February 7, 1990, the initial decisions are modified as follows:

1. These conclusions of the ALJ are hereby adopted:

(A) Ronald A. Zoby's practice of establishing gambling partnerships does not contravene the Casino Control Act or Commission regulations;

(B) Zoby performed the duties and functions of a general cashier in violation of N.J.S.A. 5:12-101(b), N.J.A.C. 19:451.11(c)(9), 1.11(g), and -1.15, by accepting and maintaining cash deposits for a patron and violated the provisions of N.J.A.C. 19:45-1.24, by failing to prepare written accounts for the receipt and disbursement of these funds;

(C) Zoby's practice of cashing checks to enable a patron to repay gambling debts to other patrons violated N.J.S.A. 5:12-101(a), -101(b) and N.J.A.C. 19:45-1.25;

(D) Greate Bay [Sands] is liable for all of the violations committed by respondent Zoby.

2. These conclusions of the ALJ are rejected:

(A) Zoby's use of his credit account to obtain gaming chips for junket patrons violated N.J.S.A. 5:12-101, N.J.A.C. 19:45-1.25 and -1.27 and that this conduct also involved the exercise of approval authority with regard to the authorization of credit in violation of N.J.S.A. 5:12-102(l )(2);

These civil penalties were assessed by the Commission:

(1) For respondent Zoby: $500 for each of the nine occasions on which he performed the duties of general cashier, $500 for each of the nine occasions on which he failed to prepare written accounts for the receipt and disbursement of funds, and $750 for each of the 18 occasions on which he cashed checks for a patron, for a total monetary penalty of $22,500; and

(2) For respondent Greate Bay [Sands]: $1,000 for each of the nine occasions on which Zoby performed the duties of a general cashier, $1,000 for each of the nine occasions on which Zoby failed to prepare written accounts for the receipt and disbursement of funds, and $1,500 for each of the 18 occasions on which Zoby cashed checks for a patron for a total monetary penalty of $45,000;

The rulings by the Commission in this administrative proceeding were affirmed by another panel of this court on June 11 1991 in all respects in an unpublished opinion (A-4195-89T3; A-4452-89T3).

This civil action for damages was dismissed by Judge Connor "for failure to state claims upon which relief can be granted to the extent plaintiffs would rely on a statutorily created basis for relief." He concluded that the Casino Control Act "does not provide an affirmative civil remedy to a gambler to recover losses." Nor, he concluded, could such a right be implied from the statutory scheme.

The Casino Control Act does not contain any express provision allowing a civil suit for damages by a casino customer based on violations of its regulatory provisions. N.J.S.A. 5:12-61(b) provides that the Commission "shall impose such sanctions upon an applicant or a licensed or registered person for violations of this section as authorized by Article 9 of this Act." Article 9 contains N.J.S.A. 5:12-111 through -130 which describe various prohibited activities and their sanctions. E.g., Adamar of N.J. Inc. v. State of N.J., 250 N.J.Super. 275, 284-85, 593 A.2d 1237, 1242-43 (1991). Included in Article 9 is N.J.S.A. 5:12-127 entitled "civil remedies" which states:

5:12-127. Civil remedies

a. The Superior Court shall have jurisdiction to prevent and restrain violations of section 126 of this act by issuing appropriate orders, including, but not limited to, ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect casino gaming operations or ancillary industries which do business with any casino licensee; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of...